Nine private banks operating in the Egyptian market gained about EGP 14.941bn net profits during the first half (H1) of 2019.

According to the performance indicators of banks in Egypt during the last period, the Commercial International Bank (CIB) – Egypt ranked first among the nine banks surveyed by Daily News Egypt recording EGP 5.355bn net profits.

QNB Alahli came in second place with net profits of EGP 4.217bn, followed by Faisal Islamic Bank of Egypt by EGP 1.376bn, Credit Agricole – Egypt by EGP 1.3bn, then the Housing and Development Bank (HDB) by EGP 1.07bn.

The bank’s profit before tax (PBT) was EGP 7.39bn in H1 of 2019, up from EGP 5.925bn in the same period last year, a growth of 40.4%.

The bank said in a statement that its net income from returns jumped by the end of H1 of 2019 by about 17% to around EGP 10bn, against EGP 7.853bn in H2 of 2018.

The bank’s revenues from fees and commissions fell 38% to EGP 805m, against EGP 1.296bn.

The bank’s capital adequacy rate stood at 25.82% at the end of H1 of 2019.

The bank said that this level of capital adequacy ratio supports the bank’s ability to cope with market volatility.

It pointed out that the ratio of non-performing loans reached 4.96% of the total loan portfolio at the end of June 2019, pointing out that the coverage rate of these loans amounted to about 200%, reflecting the bank’s ability to absorb any unexpected increase in the size of those loans.

In line with the bank’s risk management policy, CIB made provisions of EGP 795m at the end of June 2019, compared to EGP 1.291bn at the end of June 2018.

The total size of the loan portfolio at CIB – Egypt reached EGP 123.317bn at the end of June 2019, compared to EGP 119.503bn at the end of December 2018, up by 3%.

The bank’s deposit portfolio rose by 7% to reach EGP 305.563bn, compared to EGP 285.297bn in the comparison period.

According to the bank, its investments in government securities and treasury bills reached EGP 147.743bn at the end of June 2019, against EGP 157.744bn at the end of December 2018, down by 6%.

The total assets of the bank amounted to EGP 361.313bn at the end of H1 of 2019, compared to about EGP 342.461bn at the end of 2018, a growth of 6%.

QNB Alahli

The consolidated net profit of QNB Alahli reached EGP 4.217bn during H1 of 2019, an increase of 22% compared to H1 of 2018.

The bank said in a statement that the portfolio of loans and advances recorded EGP 142bn at the end of June 2019, after deducting the provisions.

The bank’s market share of total loans in the banking sector stood at 7.82% until the end of March 2019, according to the Central Bank of Egypt (CBE).

It added that the ratio of facilities granted to small and medium enterprises (SMEs) reached 22.3% of its total facilities at the end of June 2019.

According to the bank, the ratio of non-performing loans reached 2.76% of the total loan portfolio at the end of June 2019, which is one of the best ratios in the Egyptian banking sector.

The bank has shown good asset quality according to IFRS 9, the new accounting standard on loan loss provisioning, starting from 2019, while the coverage ratio for non-performing loans reached 171%.

The bank’s capital adequacy ratio stood at 19.5 %, with credit policies optimised and the bank’s investment portfolio free of any risk assets. The bank said its consolidated assets totalled EGP 253bn at the end of June 2019.

Customer deposits reached EGP 204bn at the end of June 2019, bringing the bank’s market share of total deposits in the Egyptian banking sector to 5.17% until the end of March 2019, according to the CBE.

The bank’s total loan to deposit ratio was 73%, compared to average 47% in the banking sector in March 2019.

Beltone Financial said QNB Alahli scored strong annual net income growth of EGP 2.2bn in H1 of 2019, an increase of 18.4% compared to the second quarter (Q2) of 2018, and 8.5% compared to Q1 of 2019.

In a research note, Beltone explained that this growth was the result of strong growth in net income from returns by 31.4% to reach EGP 3.5bn, which is mainly due to the increase in net interest margin (NIM) by 101 basis points in addition to the increase in average yielding assets.

Beltone said it continues to favourably view the bank’s planned growth in lending activities due to ample capital levels, with a capital adequacy ratio of 19.5% in H1 of 2019.

It added that QNB Alahli managed to reduce its investments in government treasury bills in light of the new tax amendments, which led to a decrease in treasury bills by 35.1% since the beginning of the year and used the excess liquidity in the interbank where it increased by 43.6% since the beginning of the year.

Moreover, QNB Alahli marked a decline in the cost of deposits by about 73 basis points on a quarterly basis, as a result of higher low-cost individuals deposits.

Beltone noted that interest margin on loans increased by about 40 basis points thanks to increased local currency lending.

Meanwhile, Beltone believes that the high cost of credit risk is not worrying due to the ample coverage of the provisions of non-performing loans at the bank by 170% until the end of H1 of 2019, in addition to containing the rate of non-performing loans at 2.76%.

Beltone stressed that the bank’s increased exposure to SME loans needs to be carefully monitored.

It pointed out that the return on average assets of QNB became stronger, recording 3.4% in H1 of 2019, its highest level since December 2009, resulting in a higher return on average equity.

Faisal Islamic Bank of Egypt

The net profits of Faisal Islamic Bank of Egypt in H1 of 2019 amounted to EGP 1.376bn, up by EGP 36.624m from EGP 1.340bn in H1 of 2018, marking a growth of 2.7%.

The bank explained in a disclosure to the Egyptian Exchange (EGX) that this increase in the net profits of the bank is mainly due to the increase of savings by EGP 2.9bn, where it reflected positively on the bank’s employment of deposits, thus it increased its profits. This also had a positive impact on the application of IFRS 9.

It pointed out that the bank has achieved revenues of EGP 4.575bn in H1 of 2019 against EGP 4.168bn in H1 of 2018, up by EGP 407.874m, rising by 9.8%.

The total equity of the bank was EGP 11.989bn at the end of June 2019, against EGP 11.743bn at the end of December 2018, increasing by EGP 245.567m (2.1%).

The bank’s paid-up capital settled by the end of June 2019 at EGP 1.775bn, unchanged from December 2018.

The bank said in a statement to the EGX that it achieved net profits of EGP 1.3bn during six months ending June 2019, compared to EGP 1.09bn in H1 of 2018.

Net income from returns during H1 of 2019 rose to EGP 1.5bn, compared to EGP 1.4bn in H1 of 2018.

On a quarterly basis, the bank made a profit of EGP 610.5m compared to EGP 489.5m in Q2 of 2018.

Housing and Development Bank

The Housing and Development Bank (HDB) announced that its total profits for H1 of 2019 increased by EGP 77.9m to EGP 1.07bn, against EGP 994.2m at the end of June 2018, up 7.8%.

The bank said in a statement to the EGX that customer deposits increased during the first six months of this year by EGP 3.1bn to EGP 37.2bn at the end of June 2019, compared to EGP 34.1bn at the end of December 2018, a growth of 9%.

The loans portfolio increased by EGP 1.2bn to reach EGP 14.8bn at the end of June 2019, compared to EGP 13.6bn at the end of December 2018, a growth of 9.1%.

Abu Dhabi Islamic Bank – Egypt

The consolidated financial indicators of the Abu Dhabi Islamic Bank (ADIB) – Egypt for H1 of 2019 showed an increase in net profits by 74.1% on an annual basis.

According to the bank, it recorded net profits of EGP 658.6m since the beginning of January until the end of June 2019, compared to EGP 378.2m during H1 of 2018.

As for the independent indices of the bank, the profits rose to EGP 601.2m during H1 of 2019, compared to EGP 368.46m in H1 of 2018.

Al Baraka Bank – Egypt

Al Baraka Bank Egypt’s independent financial statements for H1 of this year revealed a 30.8% y-o-y rise in net profits.

The bank said in a statement to the EGX that it recorded net profits of EGP 537.6m during H1 of 2019, compared to EGP 410.93m during H1 of 2018.

The bank’s net income from returns was EGP 986.27m compared to EGP 871.13m.

Beltone said that the financial statements of Al Baraka in Q2 of 2019 showed good growth in net income, recording EGP 271m, a growth of 27% y-o-y.

Return on average equity of the bank increased slightly by 1% y-o-y to 31.6% due to lower cost of risks.

According to Beltone, Al Baraka’s financial position continued to show good growth, with customer deposits up 8.9% YTD, up 5.2% q-o-q, to EGP 59.4bn in Q2 of 2019.

Net loans increased 1.5% YTD, down 0.5% q-o-q, to EGP 16.0bn until the end of June 2019, although it remained almost unchanged compared to Q1 of 2019.

It pointed out that Al Baraka has amended the employment of its assets after the implementation of the new income tax law, which led to the fall of treasury bill investments by 61.3% since the beginning of the year.

The bank’s asset quality remains a concern as non-performing loans (NPL) registered 7.7% until the end of June 2019, up from 7.3% and 4.3% in Q1 of 2019 and Q4 of 2018, respectively, while NPL coverage saw a decline, recording 96.3% compared to 162%.